A reliable source has mentioned that Microsoft is going full steam ahead on the often rumored but never verified "ZunePhone" (codenamed Pink) to try to compete directly with the iPhone. A Microsoft-branded smartphone will be introduced in February, there are a few spec leaks claiming that it will be powered by NVIDIA's Tegra chip. The processor would give the device groundbreaking video playback quality. There are reports that the next version of Windows Mobile, version 7, is delayed until 2010, which does not help the company at all. Microsoft needs a new mobile strategy fast.

Ballmer's recent comments that MS is planning to use the Zune software and user experience in "other mobile devices" hints of a Zune like interface on the new Zune Pink. Redmond spent an awful lot of money on that acquisition if they did not intend to make their own phone. A ZunePhone made by Danger might be a Microsoft smartphone that is actually worth the wait.

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